Cotrone Beverages makes energy drinks in three flavors: Original, Strawberry, and Orange. Company is currently operating at 75 percent of capacity. Worried about the company's performance, the company president is considering dropping the Strawberry flavor. If Strawberry is dropped, the revenue associated with it would be lost and the related variable costs saved. In addition, the company's total fixed costs would be reduced by 15 percent.

Segmented income statements appear as follows:

Product	Original			Strawberry			Orange
Sales	$	32,100		$	42,900		$	50,800
Variable costs		22,470			38,610			40,640
Contribution margin	$	9,630		$	4,290		$	10,160
Fixed costs allocated to each product line		5,000			5,700			7,500
Operating profit (loss)	$	4,630		$	(1,410	)	$	2,660

Required: a. Prepare a differential cost schedule. Alternative: Difference (all lower under Status Quo Drop Strawberry the alternative) Revenue Less: Variable costs Contribution margin Less: Fixed costs Operating profit (loss) b. Should Cotrone drop the Strawberry product line? O Yes O N